Flipkart, the biggest marketplace in India, and the toughest competitor of Amazon could face difficulties with a massive fine. The report says that Flipkart and its founder may get a fine of $1.35 billion for violating investment laws. Moreover, the Enforcement Directorate Agency, India’s finance-crime agency has asked Flipkart and its founder to come up with a valid reason why it shouldn’t face the penalty. The Flipkart associates have got the show cause notice from the higher authorities.
The report from Reuters claims that the agency is alleging violation of foreign investment laws on Flipkart. Moreover, the report says that the case concerns an investigation into allegations where Flipkart attracts foreign investments and a related party. In addition, the allegation states that Flipkart sells goods of the foreign parties to consumers on its shopping website. This act is strictly prohibited under law.
Moreover, Flipkart has already many issues at a time of development. The company is facing issues such as regulatory issues, tougher restrictions, and antitrust investigations in India. In addition, the complaints from small sellers are also increasing day by day.
According to the report, the agency office in Chennai has issued the notice to the company last month. Moreover, in the reports, Flipkart and its founder Sachin Bansal, along with investor Tiger Global receives a Show cause notice of a $1.35 billion penalties. In addition, the notice asks them to explain their innocence. And why they should not face a fine of RS 100 billion. However, the company has only 90 days time period to explain and respond to the notice.